On September 30, 2020, a fire at Gray Company’s warehouse caused severe damage to its entire inventory. Based on recent history, Gray has a gross profit of 30% of net sales. A physical inventory disclosed usable damaged goods which Gray estimates can be sold to a jobber for P50,000. The following information is available from Gray's records for the nine months ended September 30, 2020. Inventory, Jan. 1 - P550,000 Total purchases recorded, Jan. 1 – Sept. 30 (includes P120,000 of goods still in transit, shipped Sept. 29, FOB shipping point) - P3,120,000 Freight in - P60,000 Purchase returns - P200,000 Purchase discounts - P80,000 Total sales delivered and recorded, Jan. 1 – Sept. 30 - P3,900,000 Sales returns - P160,000 Sales discounts - P40,000 Using the gross profit method, how much is the inventory loss?
On September 30, 2020, a fire at Gray Company’s warehouse caused severe damage to its entire inventory. Based on recent history, Gray has a gross profit of 30% of net sales. A physical inventory disclosed usable damaged goods which Gray estimates can be sold to a jobber for P50,000. The following information is available from Gray's records for the nine months ended September 30, 2020.
Inventory, Jan. 1 - P550,000
Total purchases recorded, Jan. 1 – Sept. 30 (includes P120,000 of goods still in transit, shipped Sept. 29, FOB shipping point) - P3,120,000
Freight in - P60,000
Purchase returns - P200,000
Purchase discounts - P80,000
Total sales delivered and recorded, Jan. 1 – Sept. 30 - P3,900,000
Sales returns - P160,000
Sales discounts - P40,000
Using the gross profit method, how much is the inventory loss?
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